Iron ore has surged above $US50 a tonne, amid optimism about the appointment of a new head for China’s securities regulator.
Traders hope the changes at the regulator, where a state banking executive is set to take over the top job, will restore confidence in capital markets in the world’s second-largest economy following recent turbulence.
The iron ore price spiked 6.6 per cent to $US50.30 a tonne, taking its winning streak to three consecutive days.
The commodity’s rise buoyed the two Australian mining giants during London trade. BHP Billiton soared 8.5 per cent, while Rio Tinto jumped 8.4 per cent.
The two miners were also supported by a lift in the copper price after China said its imports of the metal increased last month.
Although iron ore remains in an extended bear market, it has bounced sharply from a trough below $US40 a tonne reached late last year.
But some observers are sceptical that the commodity can maintain its recent momentum as the market remains well supplied.
BB & T analyst Garrett Nelson told Bloomberg that the bounce in iron ore and copper prices was not sustainable.
BHP Billiton will report half-year results today and is widely expected to scrap its progressive dividend policy as prices for its products remain weak.
Source: Business Spectator